A 10-month audit into payments to a South Salt Lake City contractor found no evidence that municipal funds had been diverted into Mayor Cherie Wood’s 2017 re-election campaign but urged the city to adjust its agreements with contractors and require they submit more detailed invoices.
Sage Forensics Accounting, the outside firm that conducted the audit, on Wednesday evening summarized the findings of the report at a City Council work meeting. At Wood’s request, the group looked at contracts and bids between the city and Social Marketing Consultants (SMC), as well as at five years of payments made to the company.
“The completed audit reflects a substantial return on the city’s investment and any speculation on the value that the residents of South Salt Lake have received from the city’s relationship with Social Marketing Consultants can be laid to rest,” the city said in a news release.
“With the audit concluded, we can get back to focusing on the youth and community we serve,” Wood said in the statement.
The final 26-page report found that the city had paid $1,378,000 since 2012 to Social Marketing Consultants for grant management, public relations and outreach, Promise Program management and other services. In return, the firm generated $8,058,539.09 of grant funds for the city.
The audit began after two city councilmen, who were running for the mayor’s seat at the time, raised questions about the many roles filled by Kari Cutler, a city contractor who simultaneously ran the Promise South Salt Lake program and Wood’s political action committee (PAC), including through her 2013 election.
Cutler, who runs Social Marketing Consultants, resigned from The Committee to Keep South Salt Lake on the Move soon after the issue came up in a council meeting, and she stepped down from the before- and after-school Promise program at the end of last year.
“Promise South Salt Lake provides critical services to the city’s most at risk populations,” Cutler said in an email. “We sincerely hope that focus is never lost. The audit may have been about time tracking and return on investment. But the most important investment and the best return is seeing the opportunity for all South Salt Lake youth to graduate from high school and college and become valuable, contributing members of society.”
The results of Cutler’s work did not seem to be in question at the meeting. But the auditors did raise concerns about the way funds were reported — particularly the lack of specificity in Social Marketing Consultants’ invoices to the city, which did not separate tasks by the amount of time they’d taken and lumped a number of items, billed at $60 an hour, into time frames ranging from 0.3 hours to 204 hours.
In its response to the audit, the city noted that Social Marketing Consultants is a small business run by a single person — “without the accounting, records management, and bookkeeping functions of a larger company” — and said its contract with the city “did not require the level of specificity that the auditor, after the fact, wished to see for purposes of the audit.”
Councilman Shane Siwik, who had raised concerns last year about the funding alongside Councilman Mark Kindred, said the monetary returns from the city’s relationship with Social Marketing Consultants “speaks for itself.”
But from an accounting perspective and knowing Cutler was “closely tied to the mayor’s political action committee,” he said, “I think it is in everybody’s best interest if these things moving forward are just tidied up.”
The Promise program is now run entirely in-house. But Cutler is still working in South Salt Lake as a grant writer, and the outside auditors recommended the city adjust its contracting agreements to include spending caps based on specified tasks and a requirement for more detailed invoices. Alternatively, the auditors said the city could choose to eliminate hourly work requirements and offer a lump-sum salary instead.
In its response, the city said it “has always been committed to ensuring that all contracts, including professional services contracts, are accurate, transparent, and provide legal protection for the city” and that it will “confer with its legal department to determine the best way to implement these recommendations.”
Councilman Ben Pender, who oversaw the audit, had originally estimated it would be completed in two to three weeks. Although the scope ended up being larger than expected, Pender said “it was necessary” — even when considering the approximately $43,000 the city has paid Sage Forensics so far.
“There were some questions that needed to be answered, and I think they were answered tonight,” he said. “To me, $40,000 is a lot of money for that. But again, it was at the request of the administration to proceed forward with this audit, so I followed instructions.”